Formerly executive vice president of the company's Cloud and Enterprise group, Nadella led the development of one of the largest cloud infrastructures in the world.

Nadella, 46, was born in Hyderabad, India. He attended Mangalore University in India, where he got a bachelor's degree in electrical engineering. He went on to earn a master's degree in computer science from the University of Wisconsin - Milwaukee, then a master's degree in business administration from the University of Chicago.

He started his career as a member of the technology staff at Sun Microsystems. In 1992, he joined Microsoft. He was on his way to get a master's degree in business when the Microsoft job offer came. The company was building an operating system that ultimately would be known as Windows NT, and needed team members who understood UNIX and 32-bit operating systems, he says. Nadella wanted to complete his master's degree and take the Microsoft job. He did both.

"The opportunity ahead for Microsoft is vast, but to seize it, we must move faster, push harder and continue to transform," Nadella said.

Bill Gates, Microsoft founder and former chairman of the board of directors, will assume a new role as technology advisor, and devote more time to the direction of the company's products and technology. Microsoft also said John Thompson, lead independent director, would succeed Gates as chairman.

"During this time of transformation and remarkable opportunity for Microsoft, there is no better person to lead the company than Satya," Gates said.

Microsoft hopes that Nadella's leadership will re-ignite the company's mobile ambitions. Microsoft faces a slow erosion of its PC-centric Windows and Office franchises and needs to somehow challenge Apple and Google in the new realm of mobile computing.